Greco the end of money and the future of civilization (2009)

3 The Contest for Rulership—Two Opposing Philosophies 4 Central Banking and the Rise of the Money Power 5 The New World Order 6 Usury and the Engine of Destruction 7 The Nature and Cause

THE END OF MONEY

AND THE FUTURE OF CIVILIZATION

THE END OF MONEY

AND THE FUTURE OF CIVILIZATION

THOMAS H GRECO, JR.

CHELSEA GREEN PUBLISHING

WHITE RIVER JUNCTION, VERMONT

Copyright © 2009 by Thomas H Greco, Jr.

All rights reserved.

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Dedicated to the memory of my father, who made sure I had a good education and, though he didn’t

always understand, provided unfailing support throughout his life

List of Tables and Illustrations

1 My Purpose and My Journey

2 Mega-Crisis and Metamorphosis—Can Civilization Be Saved?

3 The Contest for Rulership—Two Opposing Philosophies

4 Central Banking and the Rise of the Money Power

5 The New World Order

6 Usury and the Engine of Destruction

7 The Nature and Cause of Inflation

8 The Separation of Money and State

9 The Evolution of Money—From Commodity Money to Credit Money

10 The Third Evolutionary Stage—The Emergence of Credit Clearing

11 Solving the Money Problem

12 Credit Clearing, the “UnMoney”

13 The State of the Alternative Exchange Movement

14 How Complementary Currencies Succeed or Fail

15 Commercial Trade Exchanges—Their Present Limitations and Potential Future

16 A Regional Economic Development Plan Based on Credit Clearing

17 The Next Big Thing in Business: A Complete Web-based Trading Platform

18 Organizational Forms and Structures for Local Self-Determination and Complementary Exchange

19 The Role of Governments in Establishing Economic and Financial Stability

20 Exchange, Finance, and the Store of Value

Epilogue

Acknowledgments

Appendix A: A Model Membership Agreement for a Credit Clearing Service

Appendix B: An Objective Composite Standard Measure of Value

Notes

References

About the Author

LIST OF TABLES AND ILLUSTRATIONS

Figure 6.1 Growth of One Dollar of Debt at Compound Interest

Figure 6.2 Actual Growth of Debt and GDP in the United States

Table 6.1 Two Distinct Kinds of Credit

Chapter 7

Figure 7.1 Watering the Milk

Figure 7.2 A 100 Million Mark Note of Weimar Germany

Figure 7.3 A One Rentenmark Note Dated January 30, 1937

Figure 7.4 A Five Hundred Billion Dinar Note of Yugoslavia

Chapter 8

Figure 8.1 The Currency Issuance, Circulation, and Redemption Circuit

Chapter 9

Figure 9.1 Bank Notes Issued as Symbolic Money,

Figure 9.2 Bank Creation of Both Symbolic Money and Credit Money

Figure 9.3 The Creation of Bank “Debt Money” as Deposits

Chapter 10

Figure 10.1 Money Viewed as a Wave

Figure 10.2 Conventional Payment Process Using Bank Credit Money

Figure 10.3 Credit Clearing Process Without Bank Credit

Chapter 12

Figure 12.1 Clearing among Three Banks, First View

Figure 12.2 Clearing among Three Banks, Second View

Figure 12.3 Clearing among Three Banks, Third View

Table 12.1 Credit Clearing—A Simple Illustration—Transaction Spreadsheet

Figure 12.4 Total Amount of Transactions Cleared

Figure 12.5 Total Credits Outstanding at Each Stage (Money Supply)

Chapter 13

Figure 13.1 A Typical Mutual Credit Account Page

Chapter 14

Figure 14.1 The Currency Issuance, Circulation, and Redemption Circuit

Figure 14.2 A Trading Fair in Buenos Aires, February 2001

Figure 14.3 Carlos Sampayo and the Zona Oeste Currency, Buenos Aires, Argentina, 2003Figure 14.4 A Collage of Some Credito Currency Notes

My Purpose and My Journey

It may seem a bold assertion to suggest that the end of money might occur any time soon Money issuch a basic feature of our everyday lives that a world without it is almost inconceivable It is a thing

as necessary as air, water, and food—because, in a developed economy, it is by the process of

exchange that we acquire virtually everything we need to live, and money is the instrument that

enables that exchange Exchange will certainly continue, but in quite a different way, and money as

we know it will become obsolete How this is occurring, and what will take its place, are the

subjects of this book

Very few people realize that the nature of money has changed profoundly over the past three

centuries, or that it has become a political instrument used to centralize power, concentrate wealth,and subvert popular government While there has been some talk about the “cashless society,” what isbeing talked about does not constitute an end to money, but rather the enhancement of “political

money” by the application of ever more effective instruments of social, economic, and political

control When I speak about the end of money, I am referring to the growing recognition that

money has become nothing more than an information system, and to the emergent mechanisms for managing exchange information outside of the conventional banking system and without the use of political monies.

The implications of this are multidimensional and far-reaching Dee Hock, CEO emeritus of VISAInternational, has said,

we are at that very point in time when a four hundred year old age is rattling in its

deathbed and another is struggling to be born A shifting of culture, science, society, and

institutions enormously greater and swifter than the world has ever experienced Ahead,

lies the possibility of regeneration of individuality, liberty, community, and ethics such as

the world has never known, and a harmony with nature, with one another and with the

divine intelligence such as the world has never seen It is the path to a livable future in

the centuries ahead, as society evolves into ever-increasing diversity and complexity.1

[emphasis in the original]

In my view, that must be a shift from elite rule based on “command and control” hierarchies andmilitary force to a more inclusive, participatory, just, harmonious, and sustainable order I maintain,

in all humility, that this book goes a long way in providing what is needed for that shift to come about

It describes the single most important thing that needs to happen, which is a fundamental change in theway we mediate the exchange of goods and services, and it provides specific advice that will enable

a process I refer to as “reclaiming the credit commons” that can be achieved by the widespread

implementation of direct credit clearing unions and private production-based voucher systems that Idescribe in later chapters

My Personal Journey

I grew up in the 1940s and 1950s That was a time of great confidence and optimism in America.Fascism had been obliterated, or so we thought Through American generosity, Europe was being

rebuilt—a magnanimous gesture toward our former enemies in the form of “the Marshall Plan.” Anddespite the “cold war” and the “communist menace,” it seemed as if progress was inevitable, that lifecould only get better for everyone The United States was the greatest, richest, most productive, andmost benevolent country in the world Like the movies we saw, the world was mostly black and

white, there were “good guys” and “bad guys,” and on the world stage we Americans were (of

course) the good guys

As a young professor, I was dismayed by the student unrest on college campuses in the late 1960sand early 1970s and their seeming disrespect for established institutions Even at conservative

Rochester Institute of Technology (RIT)2 where I was teaching, there were frequent false alarms andbomb threats that disrupted the normal class routine as buildings had to be evacuated and searched fornonexistent bombs I thought it was all part of a communistinspired plot to destroy our educationalsystem and our American way of life

Seeds of Disillusionment

Some seeds of disillusionment had already been planted in my mind a few years earlier while I wasworking on my MBA at the University of Rochester I happened to find a book in the Rush-Rheeslibrary that piqued my curiosity It must have been its provocative title that caught my interest The

book was The Power Elite by C Wright Mills, published in 1956 At that time, the very idea of an

elite class in our supposed “classless” American society was considered by most to be an absurdity.The predominant view was that America was a pluralistic society in which competing interests kept

each other in check That notion was supported by works like John Kenneth Galbraith’s American

Capitalism: The Concept of Countervailing Power Mills challenged that myth, sketching a different

picture and presenting evidence that there was a “power elite composed of men whose positionsenable them to transcend the ordinary environments of ordinary men and women; they are in positions

to make decisions having major consequences.”3 He spoke of a “higher immorality” that was “a

systemic feature of the American elite.” Mills argued that “Of course there may be corrupt men insound institutions, but when institutions are corrupting many of the men who live and work in them arenecessarily corrupted Within the corporate worlds of business, war-making and politics, theprivate conscience is attenuated—and the higher immorality is institutionalized.” 4 This was an

insightful observation of what Philip Zimbardo’s work would later prove, that perfectly normal andotherwise good people often do evil things as a result of the situations and systems in which theyhappen to be embedded.5

Awakening

I did not pursue the matter further at the time but went on with my life, married, started a family,

began my academic career, and proceeded to live the “American dream.” But life has a way of

surprising us and upsetting our plans Upon receiving tenure at RIT in 1972, I requested a sabbaticalleave to work full-time on my Ph.D at Syracuse University It was during the 1973– 74 academicyear at Syracuse that I had what might be called an epiphany I was awakened from my middle-classstupor and was able to see more clearly the way things actually are From that point onward, I

embarked upon a self directed program of personal reeducation Despite having already acquired twouniversity degrees and being well on my way toward my doctorate, I came to realize that I was

ignorant of the most fundamental requirements for living a fulfilled life, including the basic

motivations that determined my own behavior Along with my new insights and a desire to broadenthe scope of my knowledge, I developed a newfound concern for social justice, economic equity,personal freedom, self-expression, ecology, and peace I found kindred spirits in various groups andorganizations, including the Rochester Peace and Justice Education Center (PJEC)

In the Wake of Inflation

One day, as I sat at a desk in the PJEC office where I was a sometime volunteer, a colleague handed

me a book that had just arrived in the mail, In the Wake of Inflation Can the Church Remain Silent?

Skimming through it, I saw that the book was neither well-written nor adequately referenced, butdespite the amateurish style of the work, it still managed to pique my interest There were some

shocking assertions about our money and banking system of which I was dubious but not sufficientlyknowledgeable to dismiss out of hand I decided to take a closer look There were a few cited quotes

that seemed as if they might be from credible sources, one of which was a pamphlet called Money

Facts—169 Questions and Answers on Money that had been commissioned by the U.S House of

Representatives Subcommittee on Domestic Finance, Committee on Banking and Currency, and

produced by the Government Printing Office.6 That was enough to convince me that the matter

deserved further investigation

I got in touch with the author, Edward Veith, who lived in one of the Rochester suburbs, and weeventually became good friends Ed was quite elderly by that time and not well educated He hadbeen long retired, having worked many years as an elevator installer and repairman Ed was a veryreligious Christian who paid perhaps a bit too much attention to television evangelists, but he had agood heart and the “money problem” had long troubled him He could not reconcile the practice ofusury that is inherent in our system of money and banking, nor the persistent official debasement ofour national currency, with Bible scriptures and his religious beliefs And while I didn’t share in allthe particulars of his religious convictions, it was through my conversations with Ed that I, too,

became concerned about the same issues and about the credit monopoly in private hands that is oursystem of money and banking As a result, I embarked upon this work that has been my main focus foralmost thirty years It has become my personal mission to unravel the mysteries of money, to share aswidely as possible what I have learned, and to collaborate with others in creating new structures thatcan enable us to transcend what has become today a “mega-crisis.”

Starting with Money Facts, I discovered that it was a supplement to a larger report of the same congressional committee called A Primer on Money,7 which I duly acquired, read, and digested.Those sources provided quite a different picture from what is commonly believed about money andbanking, but that was only the beginning As in any investigation, one source leads to another, and agreat body of evidence is gradually built up I discovered that, in this field (as in any other) an

orthodox view had emerged that pushed aside dissenting views and limited the academic debate.Fortunately, there is a great wealth of pertinent material that remains to be discovered if one is

willing to dig deeply enough It is the results of that searching and sifting that I present in this volume.Like Edward Veith, I hope that the insights and ideas presented in my book will stimulate others toaction and guide them in the right direction

E C Riegel

In the course of my research, I have benefited from the work of a great many monetary scholars fromvarious countries of the world, many of whom are quoted in this work But one source deserves

special mention for the acuteness of his insight I have often acknowledged that my quest to

understand money has been aided more by the work of E C Riegel8 than by any other source Riegelleft a great legacy of writings and correspondence,9 a legacy that would have been lost to us exceptfor the fact that Spencer MacCallum, during his student days at Princeton, happened to meet Riegel ayear before his death and recognized the greatness of his work Years after Riegel’s death,

MacCallum acquired Riegel’s literary estate He went meticulously through all of it—cataloging andtranscribing, publishing and republishing—and made it available to others who might appreciateRiegel’s special insights and be able to build upon the conceptual foundation that he had so elegantlylaid MacCallum was acutely aware of the importance of Riegel’s work to civilization’s future,

peace, personal freedom, and general prosperity Riegel wrote about all of those things because, as

he showed so clearly, they are dependent upon the liberation of the exchange process from the

dominance of political and banking interests, and he showed how private initiative and voluntaryaction could achieve it

Much of what Riegel envisioned, and tried to implement in the 1930s and 1940s, has been

reinvented in more recent times in the form of the mutual credit clearing circles, like local exchangetrading systems (LETS), that have sprung up from the grassroots and been proliferating around theworld—along with extra-bank credit clearing services offered to businesses by commercial “barter”exchanges These pioneering efforts have provided the foundation for the more perfected and

complete systems that are now on the horizon We now have not only the understanding but also theinformation and telecommunications technologies needed for the creation of the kinds of decentralizedcredit and finance networks that Riegel suggested many decades ago

Why Yet Another Book?

This is my fourth book, each of which has had the word “money” in its title It is not money as wealth that has been my subject Rather it is the structures of money and the role of money as a medium of

exchange that have been my concern and preoccupation for a period going on thirty years This is not

a mere academic interest but a means to an end My work has been driven by a passion for socialjustice, economic equity, personal liberty, world peace, and ecological restoration

My intention in writing this book is to provide the historical background and conceptual foundationnecessary for understanding our current predicament, and to suggest (in some detail) courses of actionthat can lead us out of it Gandhi is quoted as having said, “there is enough for everyone’s need butnot for everyone’s greed.” I sincerely believe that it is entirely possible to achieve a dignified quality

of life for each and every person now on the planet or likely to be born in the coming two or threedecades, if only we humans will organize our relationships and resources toward that end As

enhanced communications bridge the distance between peoples and cultures and enable us to applyour collective intelligence across traditional boundaries, the “global village” becomes a reality Thenext step is to cooperate in removing the structural impediments to realization of a higher ideal and tobuild new structures that better serve our purpose The structures being considered here are those that

relate to power and wealth—in particular, the mechanisms for exchanging goods and services in themarket The means that I propose do not rely upon coercion or the forced redistribution of wealth, butupon voluntary, entrepreneurial, and cooperative initiatives organized at the local level but

networked globally to achieve the liberation of money and the exchange process and the

democratization of finance and economics

What I have to say in this volume repeats little of what I have said before, and that which is

repeated is merely for the convenience of the reader who may not have accessed my prior works In

1989–90, I wrote and published my first book, Money and Debt: A Solution to the Global Crisis,

which described in concise terms the basic dysfunctions and problems inherent in our present

political money and banking regime, and presented a framework of principles and ideas upon whichsolutions to the money problem might be built

In 1994, I wrote and published my second book to build upon that framework, to flesh out the ideas,

and to suggest some new possibilities New Money for Healthy Communities provided an overview

of both historical and contemporary exchange alternatives, including the “scrip” and other monetarysubstitutes that proliferated during the Great Depression of the 1930s, and the local currencies andcredit clearing systems that have emerged in more recent times It also presented several originalexchange designs that could be implemented at the local grassroots level to improve the health oflocal economies in the face of economic globalization and the damaging policies of the central

banking system My third book, Money: Understanding and Creating Alternatives to Legal Tender,

published in 2001, was an expanded, updated, and much improved version of that previous book.This present volume, based upon much additional research and experience, goes broader and

deeper From the start, I had intended to write a complementary currency handbook to provide moreand better guidance to those who are undertaking to organize exchange alternatives I had also

planned that this volume would deal with the “money problem” in a broader context so that the readerwho is new to the subject might grasp both the urgency and proper approach to its solution I quicklyrealized that in order to adequately achieve my purpose, it would be necessary to expand the

historical and conceptual aspects of my topic That material is contained largely in the first half of thebook I believe that this volume achieves its intended goals, but in a way that might seem less directthan one would expect

During my academic career I learned a very important lesson about teaching and learning As a newfaculty member in the College of Business at RIT, I was asked to teach a required course in statistics,

a course that was to become my specialty It was, in the beginning, a frustrating experience because

my students did not seem to be learning what I expected them to learn It took me a few years to

realize that my students lacked the conceptual foundation they needed to understand the methods andmeaning of statistical inference This was not their fault, it was merely a gap in their experience Itwas also my use of the “wrong” methods of instruction I had assumed that the lecture method would

be adequate and that I could begin at the higher level of abstraction common to college-level courses.But I came to realize that my students needed to have direct experience with the physical processesinvolved in taking samples and summarizing their data, and that they needed to see how their resultscompared with other samples from the same population that were taken by other students I abandonedthe lecture method and shifted my approach to using simulations, case studies, and group projects—

all of which produced far better results I actually had to invent and manufacture my own “populationsimulator,” which consisted of a bucket filled with five hundred plastic chips of various colors, eachimprinted with two numbers I then asked each student to draw a sample at random, record the dataand compare their results with those of other students in the class Some of my colleagues asked how

I would know if a student got the right answer I replied that I was not interested in checking theirarithmetic, the object of the exercise was to demonstrate the predictability of incomplete sample data.That lesson was conceptual, not methodological

It is with that in mind that I have approached the writing of this book I have tried to provide thenecessary conceptual foundation for understanding money and the exchange process, at least in so far

as that can be expected using print media I have also tried to further demystify the subjects of money,banking, and finance by tracing historical landmarks and important evolutionary shifts that have

changed the essential nature of money and have politicized money, making it an instrument for

concentrating power and wealth This book casts the inquiry within the broader context of

civilizational evolution, showing both the forces that have shaped the present global regime of moneyand power and the urgency of transcending it It seeks first to elucidate how the centralized control of

money, credit, and banking has been the key mechanism for achieving ever greater concentrations of

power and wealth, and to explain how the present global monetary system has inherent in it an

economic growth imperative that has been destructive to the environment and also to democraticinstitutions and the fabric of society Secondly, it provides specific design proposals, exchange

system architectures, and prescriptions that are applicable to various sectors and levels ranging fromthe local to regional, national, and global, proposing actions to be taken by grassroots organizations,

businesses, and governments The prescriptive elements address not only the details of exchange

system design, but also strategies for their implementation.

To borrow a phrase from Dee Hock, there is a need, “to reconceive, in the most fundamental sense,the very ideas of bank, money, and credit card.”10 I hope this book will help to stimulate that processamong a wide audience, and that it will provide the necessary understanding for entrepreneurs,

activists, and civic leaders to implement approaches toward monetary liberation that can empowercommunities, promote democratic institutions, and begin to build economies that are both sustainableand democratic I agree with economist Irving Fisher, who said “it is no exaggeration to say thatstable money will, directly and indirectly, accomplish much social justice and go far toward the

solution of our industrial, commercial and financial problems among strictly economic reforms, itstands, in my opinion, supreme.”11 But I would go even further, adding that the solution of the moneyproblem is essential to solving our environmental and political problems as well

This book is written for a general audience, but it is concerned especially with informing four

particular groups:

1 those who are already sensitive to the money problem and are curious to know more

about how money and economies work;

2 social entrepreneurs who are motivated to organize alternative exchange and

financing arrangements;

3 businesspeople, who are looking for ways to survive and thrive in an increasingly

hostile economic climate and to protect themselves from the machinations of the monetary

and financial establishment;

4 government officials at all levels who are searching for answers to the vexing

problems of fiscal management and seeking to improve the health and sustainability of

their local, regional, and national economies

This book will meet their needs by providing information and insights that are not readily availablefrom academic or journalistic sources, and offers specific advice to all groups

I recommend that the general reader peruse the chapters in the order presented, as they build uponone another in telling the story Those who already have some knowledge of the history of money andthe basic concepts of reciprocal exchange might want to skip ahead to the second half of the book toread first about the proposed solutions and details of exchange system design and implementation But

a complete understanding requires a solid conceptual foundation, which the first part of the book isintended to provide Those early chapters describe money—not as a historical artifact, but as an

evolving process Just as modern aircraft bear no resemblance to earlier modes of transportation, sodoes modern money bear no resemblance to the precious metal coins that preceded it as exchangemedia More importantly, it is essential to understand the emergent systems of credit clearing that aremaking money as we know it obsolete

Nietzsche described money as “the crowbar of power”; Henry George, more than one hundredyears ago, observed that, “What has destroyed every previous civilization has been the tendency tothe unequal distribution of wealth and power.” The challenges before us today demand that we

acquire a deep understanding of the relationships between money, power, and wealth It is my beliefthat this book, in providing essential information, ideas, and specific advice, will help the reader toachieve that understanding, and motivate action that is in the right direction It is my hope that

Congressman Dennis Kucinich is correct in saying that, “We are at a teachable moment on matters ofmoney and finance,”12 and that people the world over will then be motivated to cooperate and

organize themselves to help themselves

Mega-Crisis and Metamorphosis—

Can Civilization Be Saved?

What the caterpillar calls the end of the world,

the master calls a butterfly.

—RICHARD BACH

Prospects and Prognostication

Prognostication is a hazardous business—something that is best avoided Events have a way of

confounding the expectations of even the wisest among us There is a story that a young man onceinquired of the powerful banker and financier J P Morgan what he thought would happen to the stockmarket Morgan is said to have replied, “Young man, the market will continue to fluctuate.”

And so it is, not just for the stock market but also in the markets for bonds, commodities, and

currencies (foreign exchange) Like the weather, it is hard to predict the day-to-day ups and downs,particularly in light of the fact of market manipulations by the biggest players and interventions bygovernments and central banks Those who play the markets and are not privy to those insider moveswill have a hard time coming out ahead of the game To give an analogy, an occasional hot spell inNovember (in the northern hemisphere) should not dissuade us from recognizing that colder

temperatures are probable as winter sets in

So in any particular system, despite the inevitability of short-term fluctuations, it may still be

possible to discern a general tendency or long-term tend But even trends sometimes reverse

themselves As spring approaches, temperatures stop falling and begin to rise We can have

confidence in such expectations because we have a solid theory to explain them and considerableexperience that affirms it The point is that, even though the timing may be impossible to pinpoint, we

can often see where we’re headed and where we will eventually arrive if something does not

change If a heavy smoker has been diagnosed as having lung cancer yet continues to smoke, there is

little doubt as to her prospects So where is civilization headed? Is it a happy prospect? If not, whatcan be done to change direction and the likely outcome?

In this chapter I will begin to explain why I believe that the transition to a steady state economy,*

and, indeed, the very survival of civilization hinge upon the fundamental restructuring of money,

banking, and finance If the money problem is not solved, we can expect that the future will bring evergreater misery—continued wars for dominance over resources, accelerating despoliation of the

natural environment, continued erosion of democratic institutions, the imposition of a global

neofeudal society, and the beginning of a new dark age

Exponential Growth

Growth, in many realms, has gone too far and too fast There is a pattern of growth called exponential

or geometric that describes growth that does not proceed at a constant rate (called linear or

arithmetic), but at a rate that continually accelerates There is a fable often used to drive home the

concept In one version, an Oriental king is presented by a courtier with a gift of a chessboard Theking, wishing to reciprocate, asks what the courtier would like in return The king is surprised when

he is asked to provide an amount of rice on each of the following sixty-four days according to thenumber of squares on the chessboard—on the first day a single grain of rice on the first square, on thesecond day two grains of rice on the second square, on the third day four grains of rice on the thirdsquare, on the fourth day eight grains on the fourth square, and so on, each day doubling the amount ofthe day before The king readily agrees and orders that the rice be provided as requested At first, theamounts are trivial, but the impossibility of the bargain soon becomes apparent By the thirty-secondday, the cumulative amount required would be 4,294,967,295 grains, or about 100,000 kilograms(220,000 pounds) of rice By the sixtyfourth day, it would amount to a billion times as much as that—many times the amount of rice that exists in the whole world.13

Figure 2.1 Exponential and Linear Growth over Time

Limits to Growth

How this applies to humans and our present global circumstances has been explored by a number of

investigators over the years Perhaps the most famous is Thomas Malthus for his Essay on the

Principle of Population, published in 1826 Malthus postulated that human population grows

exponentially and that it would eventually outrun food supplies, which he saw as having potential foronly arithmetic growth While humans have, up to now, managed to forestall a general global famine,localized famines have been numerous—though often the result of political and economic factorsrather than resource limitation Other factors and other resource limitations are now coming into play.These have been explored and reported more recently—for example, in the controversial 1972 book

The Limits to Growth14 and its recent update,15 which focused specifically on five variables: worldpopulation, industrialization, pollution, food production, and resource depletion Now, as we

approach the second decade of the twenty-first century, it appears that the critical shortages will be inenergy, fresh water, and food

It is quite evident that explosive, exponential growth of anything cannot continue for very long.Nature amply demonstrates, in insect populations for instance, that such growth must eventually leveloff or the thing that has been growing exponentially will decline precipitously.16 My concerns around

these matters were first aroused in 1982 when I read a book by John Hamaker called The Survival of

Civilization.17 In it, the author described three things that were (and still are) growing exponentially

—the level of carbon dioxide in the atmosphere, human population, and debt While the first two ofthese have gained fairly widespread recognition, the “debt bomb” and its likely consequences remainobscure About this, we will have much more to say in Chapter 6 and later chapters

The intensifying mega-crisis that confronts the world today is multidimensional It is not only

environmental, but also simultaneously economic, financial, cultural, religious, and political It seemsthat all of our institutions, and the structures upon which we depend, are breaking down The newsthese days is filled with dire warnings and predictions about global warming, climate change, peakoil, and resource depletion It is good that these reports have raised the general level of awareness, atleast in the developed countries, that life on earth is facing challenges that may be unprecedented inrecorded human history On the economic front, there is news of recession, inflation, bank failures,business failures, and job losses On the political front, we hear of insurgencies, terrorist bombings,civil unrest, the breakdown of order, and the loss of freedom In the name of “homeland security,”Americans, and to some extent Europeans, have surrendered cherished freedoms and checks on

governmental abuse of power Our education system fails to educate, our health care system fails todeliver health, and our criminal justice system fails to deliver justice Are these things coincidental,

or is there some underlying systemic cause that connects them?

Paradigm Shift

The present time seems to be particularly fluid, as we hear from various quarters talk about the end

of the era, spiritual awakening, the emergence of new paradigms, and societal transformation.

Such talk suggests far-reaching changes both in human consciousness and in the nature of civilization.The late Willis Harman repeatedly asked the questions “What in the world is it that is trying to

happen?” and “What can, or should, we do to assist it?” and devoted the last part of his life to trying

to answer them During the late 1990s, I was privileged to be included in a series of colloquia duringwhich a couple dozen fortunate individuals joined with Willis to inquire, probe, discuss, and

strategize about those questions.18

We can hardly imagine the eventual outcomes of such monumental developments as genetic

engineering, cloning, nanotechnology, computers, satellite communications, the Internet, a globalizedeconomy, electronic money, global warming, and any number of predicted geophysical changes

These stresses signal an intensifying global crisis of unprecedented proportions This is a time whenfar-reaching vision is urgently needed What is the best word to describe the process we are

experiencing—reform, revolution, transformation, metamorphosis, or emergence? There are a number

of trends that common reason argues cannot continue, yet they seem to have a momentum that appearsunstoppable: human population growth, increasing economic inequity among peoples and countries,erosion of democratic principles of governance, social alienation, climate change, despoliation of theenvironment, and the increasing inability of institutions to achieve their intended purposes

Some current political figures in America and elsewhere have outlined planned economic policiesand political programs that sound appealing because they promise some needed “fixes.” Many ofthese are aimed at propping up the “system” or reversing the looting and lopsided favoritism for

wealthy and powerful elites that have characterized government policies of the past several decades.But even if politicians are sincere, they seem always to promise more than they can deliver—andwhat they promise is not a sufficient response to our present multidimensional crisis The problem ismore fundamental than that, and processes are required that can accomplish at least these goals

• Put an end to unnecessary growth and wasteful production of weapons and junk

• Enable a transition to a sustainable, steady state economy

• Restore a large measure of local control over local affairs, and nurture the emergence

of human-scale institutions

• Enable the nonviolent resolution of inevitable conflicts and harmonize the interests of

all

It is my contention that the reinvention of money is a necessary prerequisite, and that the

prescriptions outlined in later chapters are the right kind of medicine for achieving those goals

Metamorphosis

That our global civilization cannot continue on its current path seems evident What comes next is, ofcourse, much harder to predict However, I am at heart an optimist, and as such believe that the

caterpillar’s metamorphosis into the butterfly might offer us an apt analogy for our changing

civilization I believe that the “caterpillar” stage of human evolution is now coming to an end Thedisintegrating caterpillar body cannot be sustained or reconstructed, it can only proceed with themetamorphic process, which means a complete disintegration as it becomes a resource “soup” thatfeeds the emergent butterfly We are on the verge of a complete redesign and rebuilding of all ourpolitical, economic, social, and cultural structures—the things that are hard-wired through our laws,institutions, and social norms The structures we need to create must be consistent with the values weespouse and the outcomes we wish to produce These both determine and are determined by who weare, how we behave, and how we interact If we are fortunate, we will succeed in emerging as thenew creature that I think humanity was always destined to become

The Egg, the Caterpillar, and the Butterfly

The physiological processes that we observe in nature may have sociopolitical counterparts

Metamorphosis of the caterpillar into the butterfly may be more than a metaphor; it might actuallydescribe what is happening in the world.19 It starts with the egg A mature butterfly will lay a tinyegg on a leaf Then, when the conditions are right, that egg will hatch A tiny caterpillar will eat the

eggshell and then it will start to feed on the leaf It might actually eat all of the leaves of the plant, and then move on to another plant Now in the larva stage, the caterpillar has one need—to eat and grow.

That’s what caterpillars do This does not go on indefinitely—but while it is eating, the caterpillarcan devastate the host plants As a gardener, I’ve had ample opportunity to observe this firsthand Inour Tucson garden we had some hot chili pepper plants One morning my friend Donna came andsaid, “Look at that plant All the leaves are gone!” With the plant defoliated, it was easy to spot the

culprits—two tomato horn worms They’re the big green ones, about as big as my thumb, that arecommonly found on tomato plants—as we discovered, they like pepper plants too It took only two ofthem and only one night to eat almost every leaf from that plant Surprisingly, they ate not only theleaves but also the hot peppers How this compares to the way in which human civilizations consumeresources seems pretty evident.

As the caterpillar grows it goes through a process called molting When the caterpillar grows toolarge for its skin, the skin breaks open, and the caterpillar crawls out with a new skin The social andpolitical revolutions of the past few hundred years might be analogous to the molting process Theyrepresented abrupt changes for societies but not the all-encompassing transformative change that thepresent circumstances seem to require This molting process will happen four or five times, but atsome point the caterpillar stops eating and stops growing, because nothing can grow forever

Somebody ought to tell our economists and politicians that

So what does the caterpillar do then? It attaches itself to a twig, and its skin then hardens into a

chrysalis And what happens in the next phase, called the pupa stage, seems almost miraculous From

the outside, it appears that nothing is happening, but in fact a lot is going on inside the shell The

caterpillar body disintegrates, turning into a nutrient soup But in the caterpillar body there are, andthere were from the very beginning, what are called “imaginal buds” or “imaginal disks.” These areclusters of cells that contain the program of the emergent butterfly These imaginal buds were in thecaterpillar body all along, but they were dormant through the larva stage Now they become activeand start to grow and to play out the butterfly program This may take a period of days or even weeks.When conditions are right, the chrysalis breaks open and the butterfly crawls out, spreads its wings,

and flies away This is the imago stage, the mature adult butterfly The adult butterfly behavior is

quite different from that of the caterpillar While the caterpillar devours plants and appears to beterribly destructive, the butterfly flies around, sipping nectar from blossoms and polinating plants inthe process; it engages in sex and the females lay eggs to begin the cycle anew

Now it is tempting to be judgmental about the caterpillar for its destructiveness because it often candevastate crops that we depend upon for food But as destructive as the caterpillar may seem, it

performs a necessary function It accumulates the nutrients and prepares the space necessary for thebutterfly to develop and emerge And remember that chili plant? It sprouted new leaves; it recovered

We lost the peppers, but only on that one plant, and we had a couple others that were not damaged atall So in the case of human and civilizational emergence, maybe this is a stage that we have had to gothrough

Does the butterfly compete with the caterpillar? Does metamorphosis involve a battle for

dominance? Is it a revolution? The picture is not entirely clear, but evolution biologist and futurist,Elisabet Sahtouris cites recent discoveries that suggest that the process may not be quite so peaceful

as had been supposed Of the imaginal disks, she says,

Apparently the caterpillar's immune system battles the imaginal cells while it can,

perhaps strengthening them in the process But as the disks link together, the caterpillar's

immune system fails and the butterfly in formation is nourished on the soupy meltdown of

the self-digested caterpillar It took a long time for biologists to understand that the

butterfly has its own unique genome, carried by the caterpillar, inherited from ancient

butterflies who acquired them long ago in evolution ([as described in] Margulis & Sagan,

Acquiring Genomes, 2002) If we see ourselves as imaginal discs or cells working to

build the butterfly of a better world, we will understand that we are launching a new

‘genome’ of beiefs, values and practices to replace that of the current unsustainable

system We will also see how important it is to link with each other in the effort, to

recognize how many different kinds of imaginal cells it will take to build a butterfly with

all its capabilities and colors.20

True, we are voraciously consuming resources—it looks like we are destroying the planet, and if

we continue we undoubtedly will But I think our collective consciousness is beginning to change Weare becoming aware of limits and are reaching that part of our evolutionary program that says,

“Stop!”

Get With the Program

As we reach the end of our caterpillar stage of civilizational evolution, many are waking up to thebutterfly program and are diligently working to bring about the necessary changes to transform thisworld from one of strife, violence, injustice, inequity, and despotism to one of peace, harmony,

justice, equity, and freedom It appears that the imaginal buds are now beginning to stimulate oneanother into more intense activity that will result in what Dr Laurence Victor calls a “synergisticemergent eruption which will be as powerfully positive as its nuclear winter antipode is negative.”There is no exclusive “butterfly” club, but an open process in which everyone can find their own role

in their own time We’re being nourished by the accumulated resources of a dying civilization while

we find ways to build the new It is a process in which we rethink, reorganize, and restructure—firstreducing our dependence upon the dominant structures, next reorganizing ourselves into mutuallysupportive clusters or affinity groups, then creating structures appropriate to serving the needs of bothour affiliate groups and the common good

There are already many notable examples of this process moving forward in local communities.One such example that I’ve had some contact with is the Conscious Community Network21 that hasbeen developing over the past six years in northern Nevada Starting with a focus on improving thelocal economy, under the leadership of Richard Flyer this effort has evolved into a broadbased

community-building phenomenon As Flyer observes, people have a

drive, for authentic connection, as basic as needing food and water [which] has become

harder to realize in a globalized “top down” society and economy—so people have been

forming new associations where they can get this felt need met In every sector of

society (business; political; religious; and social service) and all over the planet, people

are forming small groups to get back to the basics of our common humanity and connect

with one another The future lies with groups like this, networked in a myriad of ways,

and within all parts of society We are now seeing (especially with our energy crisis) the

decline of “bigger is better” and the emergence of “small is beautiful” in local

communities—like millions of blooming flowers all over the planet within the

broken-hearted world that we live The change that is happening goes way beyond economic

and social—it is actually a spiritual rebirth showing signs of becoming visible—the

emergence of a new society from within the old—and each of us, whether we know it

consciously or not, have a vital role in being midwives to its birth.22

Coming from this perspective, I have focused my attention primarily on developing solutions thatare entrepreneurial and innovative, based on bottom-up organization and voluntary association Asone sage once put it, “If the people lead, the leaders will follow.”

* A steady state economy is one that does not require the consumption of increasing quantities ofphysical resources over time, while still producing enough of the right kinds of products and services

to sustain human societies over the long term Implicit in this definition is adequate distribution thatmatches supplies with basic needs, a focus on increasing quality of life instead of increasing quantity

of material consumption, and improved resource productivity, i.e., increased efficiency in the use ofphysical resources whereby greater value is derived from smaller amounts of material used

The Contest for Rulership—Two Opposing Philosophies

There appears to be a general tendency for those who get a little power to try to acquire more of it—and like an addictive drug, power’s ability to satisfy seems to depend upon its use in ever-largerdoses Lest the following be misunderstood, let me say at the start that I believe the same tendenciesexist in every one of us, and that our efforts to improve our collective lot should not be cast as an “usversus them” contest When I speak of ruling “elites” it is not to cast them as “evil” in opposition tothe “virtuous masses,” but to explain the distortions in human affairs that have developed over timeand to suggest what may be needed to give civilization a chance of evolving toward higher levels ofachievement and a more harmonious condition

Elitist or Egalitarian?

In 1944, F A Hayek warned that the western democracies were on the same “road to serfdom” thathad been followed by fascist Germany and Italy (and communist Russia) during the early twentiethcentury.23 He characterized the political contest as being between socialism on the one hand, andcapitalism on the other—equating the former with “collectivism” and the latter with

“individualism.”24 Hayek’s dichotomy is, I think, an overly simplistic characterization, and the

fundamental struggle goes beyond particular political ideologies or economic systems however onemight wish to define them In my view there is a contest raging in the world that is more fundamentaland less apparent than Hayek’s It is one that impinges directly upon our freedom, our dignity, and our

morality It is a struggle between what might be called elitism on the one hand, and egalitarianism on

the other By elitism I mean the centralized rulership exercised by a small privileged class, whileegalitarianism implies the dispersal of power and popular self-government As Lord Acton keenlyobserved, “Power corrupts, and absolute power corrupts absolutely.” Whether that power be wieldedthrough political office or economic dominance makes little difference; the outcome is the same It iseasy for those who live far above the masses to delude themselves into thinking that power and

privilege are their “right,” and that whatever serves the narrow self-interest of their class, or race, orreligious group also serves the general interest

Hayek was sensitive to the defects of communism, but he seems to have been blind to the defectsinherent in capitalism that make it equally susceptible to becoming totalitarian and tyrannical Thedefining feature of totalitarian systems is the centralization of power and control, whether it be

economic, political, or social, for these three are but facets of one whole Considering the millennia

of institutionalized hierarchy in our societies, Laurence Victor goes so far as to say,

I believe that [bureaucracies] are strong attractors for human psychopaths In fighting

their way to the top, individuals are selected who have the greatest tolerance for

collateral damage of their actions Today, the top [levels] of most power echelon

hierarchies are populated by psychopaths The greater the power, the greater the

collateral damage required and the greater the deception—both to others done damage

[to] and those who are indoctrinated to damage others

[There are] two alternative modes for coordinating activity so as to accomplish what

only many hands in coordinated activity could accomplish The egalitarian mode involves

voluntary cooperation to achieve requisite coordination An exemplar might be a tribe’s

collective effort in gathering materials and constructing a long house The egalitarian

mode can have leaders or managers, as roles to assist in coordination Ideally, each

person contributes as to their existing competencies and interests—and all essential roles

are covered The elitist mode involves forced labor in a top down command structure to

achieve coordination (and even to get persons to act as demanded) The force could be

facilitated by slavery or wages, both essential for survival in the prevailing situation

Once a people settle into an elitist mode, it must be defended by force and the

indoctrination of labor to accept their status.25

For that reason, any excuse for concentrating power and curtailing the personal rights and freedoms

to which all are entitled, even national defense or a “war on terror,” must be viewed with suspicion

—for as H L Mencken observed more than seventy years ago, “The whole aim of practical politics

is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with anendless series of hobgoblins, all of them imaginary.”26 The real hobgoblins, often created by

government itself, can be effectively addressed only by a responsible citizenry acting together fromits community base

Law, by itself, is incapable of restraining the behavior of the addict, for addiction creates

imperatives that are stronger than the inhibitions induced by law But, beyond that, power addicts’need for ever more power leads them to seek ways to control the very process by which laws aremade, changed, and adjudicated While the separation of governmental powers into executive,

legislative, and judiciary functions was intended to offer some assurance of pluralism and

impartiality, the ever-widening socioeconomic differences have the effect of drawing these functionstogether into the hands of power elites whose members possess shared interests that are typicallyantagonistic to those of the masses who comprise the rest of society As legal constraints upon

concentrated power are gradually nullified, government becomes a weapon against freedom, and theruling class tightens its grip The people must be ever watchful for the telltale signs of creeping

totalitarianism—government secrecy, stonewalling, obfuscation, classified information, abuse ofprisoners, surveillance of citizens, harassment of dissenters, appeals to national security and

executive privilege, and covert interventions in the affairs of other countries These signs have beenplainly evident in America for some time, and the trend toward totalitarian government has been

ramped up since the events of September 11 This is clearly shown in Naomi Wolf’s book The End of

America, which outlines ten steps common to all transitions from democratic to totalitarian rule, and

shows how they are already manifest today in the United States.27 Chalmers Johnson, in his

Blowback trilogy,28 has clearly described how America’s imperial overreach has all but destroyedour republican form of government

It is said that “the price of freedom is eternal vigilance,” but it cannot end there—vigilance is butthe beginning of freedom The acquisition and preservation of freedom require, in addition,

responsible civic action An informed, organized, and politically active citizenry is the only kind that

has any chance of remaining free

The Contest in American History: Monarchy or Republic?

A close examination of the early days of the American republic is worthwhile for gaining insights intothe ideological struggle that continues to this day In early American history, the contest between theforces that favored elite rule and those that favored pluralistic “government by the people” is

epitomized in the persons of Alexander Hamilton and Thomas Jefferson Jefferson, and Andrew

Jackson after him, envisioned an American government that opposed aristocracy and enabled powerand property to be widely shared It is not commonly recognized that the forces in favor of elite rulewere prominent in the formation of the government of the United States, or that their intentions, thoughseemingly stymied on the political front, have been subsequently and superbly carried out by

surreptitious means on the monetary and financial front

This ideological polarity is nowhere better described than in Arthur Schlesinger’s brilliant

historical treatise The Age of Jackson Hamilton was of the opinion that “No society could

succeed ‘which did not unite the interest and credit of rich individuals with those of the state.’”29 Hewas distrustful of ordinary people to rightly judge matters—indeed, “The rock on which AlexanderHamilton built his church was the deep-seated conviction that society would be governed best by anaristocracy, and that an aristocracy was based most properly and enduringly on property.”30 As

Jefferson himself proclaims in his memoir, “a short review of facts will show, that the contests of thatday were contests of principle, between the advocates of republican, and those of kingly government,and that had not the former made the efforts they did, our government would have been, even at thisearly day, a very different thing from what the successful issue of those efforts have made it.”31

While Jefferson favored a stronger union than that which emerged under the Articles of

Confederation, he was vehemently opposed to the reconstruction of monarchist government on theAmerican continent He describes in detail how some high army officers suggested to Washingtonthat, prior to disbanding the revolutionary army, Washington should use it to secure to himself thecrown “The indignation with which he is said to have scouted this parricide proposition was equallyworthy of his virtue and wisdom.” Failing in that attempt, these same individuals proposed “the

establishment of an hereditary order to be ingrafted into the future frame of government, and

placing General Washington still at their head.” This, too, Washington resisted

But the acquisitive forces are nothing if not persistent Upon the convening of the states at

Annapolis in September 1786, Jefferson described this situation:

[So] general through the States was the sentiment in favor of the former [republican

government], that the friends of the latter [monarchy] confined themselves to a course of

obstruction only, and delay, to everything proposed; they hoped, that nothing being done,

and all things going from bad to worse, a kingly government might be usurped, and

submitted to by the people, as better than anarchy and wars internal and external, the

certain consequences of the present want of a general government The effect of their

manoeuvres, with the defective attendance of Deputies from the States, resulted in the

measure of calling a more general convention, to be held at Philadelphia At this, the

same party exhibited the same practices, and with the same views of preventing a

government of concord, which they foresaw would be republican, and of forcing through

anarchy their way to monarchy But the mass of that convention was too honest, too wise,

and too steady, to be baffled and misled by their manoeuvres.32

Power by Other Means

Failing on the political front, the elitists, under the leadership of Alexander Hamilton, moved forwardtheir monetary and financial schemes Jefferson had been away on his mission to France during theConstitutional Convention, but upon his return in December of 1789, he was appalled to observe theextent of monarchist sentiment within the executive branch of the government

Hamilton’s financial system had then passed It had two objects; first, as a puzzle, to

exclude popular understanding and inquiry; second, as a machine for the corruption of the

legislature; for he avowed the opinion, that man could be governed by one of two

motives only, force or interest; force, he observed, in this country was out of the

question, and the interests, therefore, of the members must be laid hold of, to keep the

legislative in unison with the executive And with grief and shame it must be

acknowledged that his machine was not without effect; that even in this, the birth of our

government, some members were found sordid enough to bend their duty to their interests,

and to look after personal rather than public good.33 [emphasis added]

Jefferson goes on to say,

But Hamilton was not only a monarchist, but for a monarchy bottomed on corruption!

In proof of this, I will relate an anecdote, for the truth of which I attest the God who made

me Before the President [Washington] set out on his southern tour in April, 1791, he

addressed a letter of the fourth of that month, from Mount Vernon, to the Secretaries of

State, Treasury and War, desiring that if any serious and important cases should arise

during his absence, they would consult and act on them And he requested that the Vice

President should also be consulted This was the only occasion on which that officer was

ever requested to take part in a cabinet question Some occasion for consultation arising,

I invited those gentlemen (and the Attorney General, as well as I remember,) to dine with

me, in order to confer on the subject After the cloth was removed, and our question

agreed and dismissed, conversation began on other matters, and by some circumstance,

was led to the British constitution, on which Mr Adams observed, “purge that

constitution of its corruption, and give to its popular branch equality of representation,

and it would be the most perfect constitution ever devised by the wit of man.” Hamilton

paused and said, “purge it of its corruption, and give to its popular branch equality of

representation, and it would become an impracticable government: as it stands at

present, with all its supposed defects, it is the most perfect government which ever

existed.” And this was assuredly the exact line which separated the political creeds of

these two gentlemen The one was for two hereditary branches and an honest elective

one: the other, for an hereditary King, with a House of Lords and Commons corrupted to

his will, and standing between him and the people [emphasis added]

Hamilton was, indeed, a singular character Of acute understanding, disinterested,

honest, and honorable in all private transactions, amiable in society, and duly valuing

virtue in private life—yet so bewitched and perverted by the British example as to be

under thorough conviction that corruption was essential to the government of a nation.34

The core element in Hamilton’s financial schemes was to establish in America a central bank

modeled after the Bank of England He was able to achieve his purpose in large part because, asJefferson observes, “[Washington] was not aware of the drift, or of the effect of Hamilton’s schemes.Unversed in financial projects and calculations and budgets, his approbation of them was bottomed

on his confidence in the man.”35

It is easy for us in our time to see Hamilton as a villain and Jefferson as a saintly champion of thepeople, but nothing is ever as clear cut as that—a thorough reading of history enables a better

understanding of the players’ motives Hamilton’s overarching objective was to create a strong

central government that might enable a weak and fledgling American union to withstand the pressuresbrought upon it by the imperial powers of Europe, most notably Britain and France While one mightgrant the necessity of that time for concentrating more power at the federal level to protect its

interests and its people from the then world powers, one must be extremely dubious about the

necessity or wisdom of the United States becoming, as it has, a twenty-first century global hegemonicempire

Hamilton’s most often quoted assertion is this one: “A national debt, if it is not excessive, will be

to us a national blessing.”36 One of Hamilton’s first proposals upon taking office as Washington’ssecretary of the treasury was that the federal government assume the Revolutionary War debts

incurred by the various states Though it required the federal government to go deeply into debt, thatdebt had the desired effect of cementing the union of the states An essential part of Hamilton’s plancalled for creating revenues sufficient to service the debt and to establish the credit of the federalgovernment, which enabled it to attract much needed capital for development from abroad Federalgovernment revenues in those days, and even up until the twentieth century, were derived mainly fromduties on imported goods and excise taxes on some domestically produced commodities Hamilton’splan gave the federal government a monopoly on customs duties With persistence and some dealingwith Jefferson and Madison over the location of the new nation’s capital, Hamilton succeeded ingetting these proposals through Congress and signed by President Washington.37

Further along the lines of strengthening the union, Hamilton reasoned that it was essential to drawthe loyalty of the moneyed class toward the union and away from their respective states This was onereason for the assumption of the states’ debts As John Steele Gordon explains it, “The debts [of thestates], of course, were largely held by the prosperous men of business, commerce, and agriculture—the oligarchs, in other words These men’s loyalties lay mainly with their respective states and thecozy local societies in which they had grown up Although they had largely supported the creation ofthe new Union, Hamilton had every reason to suppose that their support would quickly fade if theirself-interest dictated it Hamilton, therefore, was anxious to make it in the self-interest of these men tocontinue their support of the Union.”38

For us today, the most significant aspect of Hamilton’s program was his effort to establish an

American central bank along the lines of the Bank of England “Hamilton saw it as an instrument offiscal efficiency, economic regulation, and money creation Jefferson saw it as another giveaway to

the rich and as a potential instrument of tyranny Furthermore, Jefferson and Madison saw it as

patently unconstitutional for the federal government to establish a bank, for the Constitution nowheregives the federal government the explicit power to charter a bank or, for that matter, any other

The battle for rulership has continued to rage throughout the history of the United States, even up tothe present day Except for occasional victories—most notably under the leadership of Jefferson,Jackson, and perhaps Franklin Roosevelt—the elitist forces have step-by-step tightened their grip onpower, in the name of national security arrogating ever more power to the executive branch, until theCongress has become a mere rubber stamp While the United States maintains the trappings of a

democratic republic, it is in truth an imperial power under the control of a global oligarchy As theonly remaining superpower, it has been used to achieve “full spectrum dominance” that can assurecontrol of the world’s major resources, and usher in a “new world order” in which the mass of the

population in all countries is increasingly dominated and exploited by a very small ruling class using

whatever means it may deem necessary

As Jeffrey Sachs observes, “When a society is economically dominant, it is easy for its members toassume that such dominance reflects a deeper superiority—whether religious, racial, genetic, cultural,

or institutional—rather than an accident of timing or geography.” He notes the historical emergence ofall kinds of theories that justified “brutal forms of exploitation of the poor through colonial rule,

dispossession of the properties and lands of the poor by the rich and even slavery.”40

President Bill Clinton’s mentor at Georgetown University, Professor Carroll Quigley, has candidlyrevealed that

the powers of financial capitalism had another far-reaching aim, nothing less than to

create a world system of financial control in private hands able to dominate the political

system of each country and the economy of the world as a whole This system was to be

controlled in a feudalist fashion by the central banks of the world acting in concert, by

secret agreements arrived at in frequent private meetings and conferences The apex of

the system was to be the Bank for International Settlements in Basle, Switzerland, a

private bank owned and controlled by the world’s central banks which were themselves

private corporations Each central bank sought to dominate its government by its

ability to control Treasury loans, to manipulate foreign exchanges, to influence the level

of economic activity in the country, and to influence cooperative politicians by

subsequent economic rewards in the business world.41

In the following chapters, we shall describe the evolution of the mechanisms by which these goalshave been achieved

Central Banking and the Rise of the Money Power

It should be evident that any effort to alter the status quo must be informed by a thorough

understanding of the mechanisms that have been used to consolidate power and wealth In our modern

era, the chief instrument by which that consolidation has been achieved is by control of the

machinery for creating money Money has consistently been abused by those who have had authority

over it In medieval times, it became common for princes and kings to recall and reissue the gold andsilver coins that then served as money, each time enriching themselves by reducing the precious metalcontent of the new coins and forcing their subjects to accept them at the same nominal value as theold

But it is only within the past three centuries that the machinery of money and banking has been

refined to enable levels of control approaching the absolute to be wielded on a worldwide basis by ahandful of individuals In something resembling “the divine right of kings” they must imagine

themselves to possess superior qualities that entitle them to their positions of privilege, dominance,and rulership This privilege, they claim in private to be their legitimate reward for bringing order tothe “unruly mob.” Surely the most valuable and effective privilege for maintaining control and

appropriating wealth in the modern era has been the privilege of controlling the machinery of moneyand banking Meyer Amschel Rothschild, the patriarch and founder of the celebrated banking dynasty,

is quoted as having said, “Give me the power to create a nation’s money and I care not who makes thelaws.” And from whence does that power derive? It is the corruption of government that Hamiltonspoke of Make no mistake about it, government—of whatever shape or description—is a dispenser

of privilege It favors the few at the expense of the many and becomes ever more corrupt as it

arrogates ever more power This is the seed and soil from which central banking has sprung

Central Banking, an Unholy Alliance

Imagine being able to borrow and spend as much money as you want and never having to pay any of itback Imagine being able to write an IOU for each purchase you make and have someone else redeem

it, or being able to write checks against someone else’s bank account Imagine having the legal

privilege to create virtually all of the nation’s money by making a few bookkeeping entries and

lending it out at interest Shocking as it may seem, this is the nature of the monetary and financial

regime that has spread around the world But who holds these privileges and how are they exercised?

The Bank of England

That story begins with the founding of the Bank of England more than three hundred years ago

William III (William of Orange) and Mary II had ascended to the throne of England as coregents in

1689 William was at war with France (under Louis XIV) in what is known as the War of the League

of Augsburg (1688–97) War is an expensive proposition, and William needed to raise money tofinance it Another William, the Scotsman William Patterson, provided the solution to the king’s

financial problem—“he proposed a loan of £1.2m to the government; in return the subscribers would

be incorporated as The Governor and Company of the Bank of England with long term banking

privileges including the issue of notes.”42 By 1708, the government had fallen more deeply into debt

to the bank, and as a result the bank’s privileges were extended—giving it a virtual monopoly in theissuance of banknotes.

That was the beginning of the unholy alliance between politics and finance that has enabled

governments to spend without being limited by tax revenues, and has given bankers the privilege ofcreating credit money (originally, in the form of banknotes, now as “deposits”) and lending it out atinterest The Bank of England became the prototype for central banks that were eventually to beestablished in virtually every country of the world

Riegel provides this summary of the matter:

Throughout the ages the devices of cunning men have turned money to their nefarious

purposes Money, beginning with private enterprise as a means of escaping the limitation

of barter soon developed the cheat to exploit the honest trader who in an effort to protecthimself turned to government for protection, only to find that now he had two thieves, theprivate money changer and the political plunderer working hand in glove against him Bythis combination the money changer gained the prestige of political sanction through

legislative license and the state secured a deceptive device for laying taxes upon the

citizenry [by means of the hidden tax called inflation] It was and remains a vicious

alliance.43

Professor Quigley regarded “the founding of the Bank of England by William Paterson and hisfriends in 1694” as “one of the great dates in world history.” Quigley observed that

this organizational structure for creating means of payment out of nothing, which we call

credit, was not invented by England but was developed by her to become one of her chiefweapons in the victory over Napoleon in 1815 The emperor, as the last great

mercantilist, could not see money in any but concrete terms, and was convinced that his

efforts to fight wars on the basis of “sound money,” by avoiding the creation of credit,

would ultimately win him a victory by bankrupting England He was wrong, although thelesson has had to be relearned by modern financiers in the twentieth century.44

Central Banking in the United States

No sooner had the colonies taken steps to sever their ties with Britain, than the elite forces set aboutreplicating the Bank of England model in America The first attempt in that direction had been madeeven prior to the end of the Revolutionary War with the chartering by Congress of the Bank of NorthAmerica on the very last day of 1781 Wikipedia provides this account:

Earlier, on April 30, 1781, Alexander Hamilton, then only twentythree years old and stillserving in the military, had sent [Finance Minister, Robert] Morris a letter First,

Hamilton revealed that he had recommended Morris for the position the previous summerwhen the constitution of the executive was being solidified Second, he proceeded to layout a proposal for a National Bank Morris, who had corresponded with Hamilton

previously (1780) on the subject of funding the war, immediately drafted a legislative

proposal based on Hamilton’s suggestion and submitted it to the Congress Morris

persuaded Congress to charter the Bank of North America, the first private commercial

bank in the United States.45

As Murray Rothbard describes it, “This bank, headed by Morris himself [in an evident conflict ofinterest], was not only the first fractional reserve commercial bank in the U.S.; it was to be a

privately owned central bank, modeled after the Bank of England [The Bank] received the

privilege from the government of its notes being receivable in all duties and taxes to all governments,

at par with specie In addition, no other banks were to be permitted to operate in the country In returnfor its monopoly license to issue paper money, the bank would graciously lend most of its newlycreated money to the federal government to purchase public debt and be reimbursed by the haplesstaxpayer.”46 The Bank of North America, despite its monopoly powers, did not fare well By the end

of 1783, it had ceased to function as a central bank and shifted its status by obtaining a state charter inPennsylvania

The First Bank of the United States

The next attempt came a few years later, after the Articles of Confederation had been replaced by theConstitution Led by Alexander Hamilton, who had fought alongside George Washington in the

Revolutionary War and now served in his cabinet as Secretary of the Treasury, the elite interestsproposed that a Bank of the United States be chartered to serve as the depository of federal

government funds The bank also, like the Bank of England, was to enjoy certain privileges It wouldhave the power to issue notes that would be acceptable by the government in payment of taxes In

1791, Congress approved the charter and the bill was signed by President Washington Thus, the firstBank of the United States came into being It was a private corporation owned mainly by foreign,mostly British, interests This bank lasted until 1811 when its twenty-year charter expired and the bill

to renew it failed by one vote in Congress

Andrew Jackson and the “Bank War”

The Second Bank of the United States, chartered in 1816, was essentially a replica of the first Bank ofthe United States It also had a twenty year charter that was due to expire in 1836, at which time thebank’s proponents expected that it would be renewed, but the election of Andrew Jackson as

President in 1828 threw a wrench into that plan In 1832, during Jackson’s campaign for a secondterm, the bank became a major issue Jackson argued that “The Bank of the United States is in itself aGovernment which has gradually increased in strength from the day of its establishment.”47 He said

of the bankers, “You are a den of vipers and thieves I intend to rout you out, and by the Eternal God, Iwill rout you out.” He saw himself as a champion of the people against “a heartless monied

aristocracy.”48 In his view, the “bank war” was a contest for rulership—would the United States begoverned by the people through their elected president and representatives, or by an unelected

financial elite through their central bank instrument?

Nicholas Biddle, then president of the bank, had lobbied Congress to pass a bill to recharter thebank early The sentiments of the antibank forces were ably expressed by Thomas Hart Benton on thefloor of the Senate:

First: Mr President, I object to the renewal of the charter because I look upon the

bank as an institution too great and powerful to be tolerated in a government of free and

equal laws Secondly, I object because its tendencies are dangerous and

pernicious to the government and the people It tends to aggravate the inequality of

fortunes; to make the rich richer, and the poor poorer; to multiply nabobs and paupers

Thirdly, I object on account of the exclusive privileges, and anti-republican

monopoly, which it gives to the stockholders.49

Despite such pleas as Benton’s, Congress did pass the recharter bill—but on November 24, 1832,Jackson vetoed it While Jackson acknowledged in his veto message that “A bank of the United States

is in many respects convenient for the Government and useful to the people,” he argued that the bank

as constituted was a privileged monopoly created to make rich men “richer by act of Congress.” The

bank, he declared, was “unauthorized by the Constitution, subversive of the rights of the States, anddangerous to the liberties of the people.”50 In the penultimate paragraph of his veto message, Jacksonprovided this inspiration and challenge:

Experience should teach us wisdom Most of the difficulties our Government now

encounters and most of the dangers which impend over our Union have sprung from an

abandonment of the legitimate objects of Government by our national legislation, and the

adoption of such principles as are embodied in this act [to recharter the Bank] Many of

our rich men have not been content with equal protection and equal benefits, but have

besought us to make them richer by act of Congress By attempting to gratify their desires

we have in the results of our legislation arrayed section against section, interest against

interest, and man against man, in a fearful commotion which threatens to shake the

foundations of our Union It is time to pause in our career to review our principles, and if

possible revive that devoted patriotism and spirit of compromise which distinguished the

sages of the Revolution and the fathers of our Union If we can not at once, in justice to

interests vested under improvident legislation, make our Government what it ought to be,

we can at least take a stand against all new grants of monopolies and exclusive

privileges, against any prostitution of our Government to the advancement of the few at

the expense of the many, and in favor of compromise and gradual reform in our code of

laws and system of political economy.51

Those words seem even more relevant today than they were when Jackson wrote them

It was Jackson’s intention to begin withdrawing the government’s funds from the central bank in

1833, a feat that he was able to accomplish only after replacing two secretaries of the treasury whohad refused to carry out his order When Jackson appointed Roger B Taney to the post, the

instructions were carried out Government funds were withdrawn from the bank and federal tax

revenues were subsequently deposited in various state banks

Biddle was outraged at Jackson’s actions and retaliated by constricting credit throughout the

country He attempted to pressure Jackson to change his policies toward the bank by calling in loansand refusing to make new ones This all but crashed the economy, causing widespread distress bydepriving legitimate business of the credit money it needed to conduct normal operations ArthurSchlesinger describes the situation thusly: “The determination which enabled Jackson to resist thehysteria of panic came basically from the possession of an alternative policy of his own Madison had

surrendered to a corresponding, though less intense, pressure in 1816 [when he allowed the SecondBank of the United States to be chartered] because he had no constructive program to offer But, forJackson, the emotions and ideas which underlay the hardmoney case against the Bank were

crystallizing into a coherent and concrete set of measures, designed to capture the government for ‘thehumble members of society,’ as Hamilton’s system had captured it for ‘the rich and powerful.’”53Initially, the business community blamed Jackson for their distress, but they eventually came to

realize that the fault lay with Biddle and the Second Bank

Figure 4.1 1836 Cartoon—The “Bank War” between Andrew Jackson and Nicholas Biddle This

1836 cartoon is a satire of President Jackson’s campaign to destroy the Second Bank of the UnitedStates, which is represented as a many headed snake, by use of his cane—which represents his veto

of the recharter bill The largest of the snake’s heads is that of Nicholas Biddle, the bank’s

president.52

Andrew Jackson is not the only American president to have warned against the money power.Thomas Jefferson said, “I sincerely believe that banking establishments are more dangerous thanstanding armies.”54 President James A Garfield, who had previously been chairman of the BankingCommittee in the House of Representatives, said, “Whoever controls the money in any country ismaster of all its legislation and commerce.”55

The Free Banking Era

The demise of the Second Bank was followed by a period known as the “free banking” era (1837–63), during which the credit creation process was opened up to competition and oversight of bankingactivities devolved to the various states While critics have pejoratively referred to this time as theera of “wildcat banking,” a defensive statement has come from no less a personality than formerFederal Reserve Chairman Alan Greenspan, who said:

Free banking meant free entry under the terms of a general law of incorporation rather

than through a specific legislative act The public, especially in New York, had become

painfully aware that the restrictions on entry in the chartered system were producing a

number of adverse effects For one thing, in the absence of competition, access to bank

credit was perceived to have become politicized—banks’ boards of directors seemed to

regard those who shared their political convictions as the most creditworthy borrowers, a

view not unknown more recently in East Asia In addition, because a bank charter

promised monopoly profits, bank promoters were willing to pay handsomely for the

privilege and legislators apparently eagerly accepted payment, often in the form of

allocations of bank stock at below-market prices

While free banking was not actually as free as commonly perceived, it also was not

nearly as unstable The perception of the free banking era as an era of “wildcat” banking

marked by financial instability and, in particular, by widespread significant losses to

noteholders also turns out to be exaggerated Recent scholarship has demonstrated that

free bank failures were not as common and resulting losses to noteholders were not as

severe as earlier historians had claimed.56

During that time, each bank issued its own currency notes and it was left to the market to evaluatetheir soundness Fractional reserve banking prevailed and banknotes were still redeemable for specie(gold or silver) Typically, the farther a banknote strayed from its home territory, the more it would

be discounted from face value—or sometimes completely refused as payment The plethora of

currencies in circulation gave rise to a large number of “note brokers,” who made a profit by buyingbanknotes at a discount then presenting them at the issuing banks for redemption at par The activities

of the note brokers provided an important element of discipline to the issuing banks, since they had to

be prepared to redeem their notes that were rapidly returning from the hinterlands These brokers alsopublished periodic directories called “banknote reporters,” which listed the prevailing discounts onthe notes of thousands of banks This information was invaluable to merchants and other banks

Greenspan describes it thusly:

Throughout the free banking era the effectiveness of market prices for notes, and their

associated impact on the cost of funds, imparted an increased market discipline, perhaps

because technological change—the telegraph and the railroad—made monitoring of banks

more effective and reduced the time required to send a note home for redemption

Between 1838 and 1860 the discounts on notes of new entrants diminished and discounts

came to correspond more closely to objective measures of the riskiness of individual

banks.57

In an unexpectedly friendly gesture toward free banking, Greenspan goes on to say,

During the Civil War, today’s bank structure was created by the Congress It seems clear

that a major, if not the major, motivation of the National Bank Act of 1863 was to assist

in the financing of the Civil War But the provisions of the act that incorporated key

elements of free banking provide compelling evidence that contemporary observers did

not regard free banking as a failure These provisions included free entry and

collateralized bank notes.58

As financial crises proliferate in our own time, economists would do well to make a careful study

of the free banking period and to propose the reimplementation of those “key elements.”

The Federal Reserve

The interests of international banking and finance might be delayed, but they were not to be defeated.From the time of the Civil War onward, they gradually resumed control and eventually managed to get

a new central bank in the form of the Federal Reserve The act to create the Fed was passed by

Congress in 1913—just before Christmas, when most representatives had already gone home for the

holidays The secret meetings and other events leading up to its passage are well told in a book, The

Creature From Jekyll Island,59 and in various other sources.60 Rothbard offers this critical

assessment: “The financial elites of this country, notably the Morgan, Rockefeller, and Kuhn, Loebinterests, were responsible for putting through the Federal Reserve System, as a governmentally

created and sanctioned cartel device to enable the nation’s banks to inflate the money supply in acoordinated fashion.”61

President Woodrow Wilson, who ironically supported the creation of the Fed, also expressed

dismay over the concentration of power in the hands of a financial elite In his book, The New

Freedom, Wilson said, “Some of the biggest men in the United States, in the field of commerce and

manufacture, are afraid of somebody, are afraid of something They know that there is a power

somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that theyhad better not speak above their breath when they speak in condemnation of it.” He made it clear that

he understood the nature of that “power” saying,

there has come about an extraordinary and very sinister concentration in the control of

business in the country However it has come about, it is more important still that the

control of credit also has become dangerously centralized It is the mere truth to say that

the financial resources of the country are not at the command of those who do not submit

to the direction and domination of small groups of capitalists who wish to keep the

economic development of the country under their own eye and guidance The great

monopoly in this country is the monopoly of big credits So long as that exists, our old

variety and freedom and individual energy of development are out of the question A

great industrial nation is controlled by its system of credit Our system of credit is

privately concentrated The growth of the nation, therefore, and all our activities are in

the hands of a few men who, even if their action be honest and intended for the public

interest, are necessarily concentrated upon the great undertakings in which their own

money is involved and who necessarily, by very reason of their own limitations, chill and

check and destroy genuine economic freedom This is the greatest question of all, and to

this statesmen must address themselves with an earnest determination to serve the long

future and the true liberties of men This money trust, or, as it should be more properly

called, this credit trust, is no myth; it is no imaginary thing.62

Congressman and 2008 presidential candidate Ron Paul has called for the abolition of the Federal

Reserve During a hearing before the House Financial Services Committee on February 11, 2004,Paul, referring to the Federal Reserve, suggested that “maybe there’s too much power in the hands ofthose who control monetary policy? The power to create the financial bubbles The power to maybebring the bubble about The power to change the value of the stock market within minutes That to me

is just an ominous power and challenges the whole concept of freedom and liberty and sound money.”The then Fed Chairman, Alan Greenspan, appearing before that committee, responded,

“Congressman, as I’ve said to you before, the problem you are eluding [sic] to is called the

conversion of a commodity standard to fiat money We have statutorily gone onto a fiat money

standard and as a consequence of that it is inevitable that the authority, which is the producer of the

money supply, will have inordinate power And the power that we have is all granted by you [the

Congress] We don’t have any capability whatsoever to do anything without the agreement or even theacquiescence of the Congress of the United States.”63

That, of course, is technically correct, but very few members of Congress have been willing tochallenge the power of the Fed or even to exercise the most perfunctory degree of oversight Most arebeholden to the same interests that have created the Fed and the global money and banking regime

Central Banking Spreads around the World

Central banking, with its inherent privileges and conflicts of interest, has spread around the world.Quigley has pointed out that, “In most countries the central bank was surrounded closely by the almostinvisible private investment banking firms These, like the planet Mercury, could hardly be seen in thedazzle emitted by the central bank which they, in fact, often dominated Yet a close observer could

hardly fail to notice the close private associations between these private, international bankers and

the central bank itself.”64

Although the Bank of England was the archetypical central bank, it was not necessarily by directemulation that central banks were established in virtually every country But there can be little doubtthat it has been brought about by the same objectives, along with pressures from the internationalbanking establishment The same circumstances seem to have led to similar outcomes of collusionbetween the financial powers and the political powers Professor Heinrich Rittershausen traces thedevelopment from private issuing banks to modern central banks through the following stages:65

A) The exclusive license to issue notes is granted to a bank as a state privilege

B) The state discovers that the bank is a source of credit

C) The government tax offices begin to accept the still purely private notes in tax

payments instead of metallic money

D) The state needs money in times of emergencies [like wartime] The bank cannot

refuse large loans to the government [for deficit spending] Economically, these loans are

long term

E) In this way the note issuance becomes excessive Redemption (in metallic money)

becomes impossible and therefore is abolished by law

F) In anticipation of feared reactions of the public, i.e., discounting the notes or refusal

of acceptance, the notes are given legal tender* power, i.e., compulsory acceptance By

this means, the notes lose their character as an issue of a private bank currency note

G) Legal tender (forced acceptance of the notes) and repudiation of note redemption

make the metallic standard inoperable The measure of value now becomes the paper

currency itself The automatic regulation of the note supply by market forces comes to an

end.66

Riegel warned us that, “In the exercise of the money power, under the dictates of political

expediency, the state is driven inevitably from libertarian forms of democracy and republicanism tothe autarchic forms of fascism, socialism and communism.” Ultimately, these three come to look verymuch alike, and in recent decades we have seen this tendency become ever more a reality,

particularly in the United States This sad state of affairs is well documented by Chalmers Johnson in

his recently published Blowback trilogy.

* Author’s note: Legal tender is a form of payment that must, by law, be accepted when offered insettlement of a debt obligation If a creditor refuses to accept payment of legal tender money by adebtor, the courts will not support the creditor’s claim against the debtor to collect through othermeans A further implication is that if both a precious metal coin and a debased paper currency notehave legal tender status, debtors will choose to pay using the paper notes, and the coins will go out ofcirculation This is the essence of “Gresham’s Law.” The nature and consequences of legal tenderwill be more fully treated later in the book

The New World Order

Benjamin Disraeli, the British prime minister under Queen Victoria, once said that, “The world isgoverned by very different personages from what is imagined by those who are not behind the

scenes.” Those who are set before the public often do us the favor of boldly describing just what it isthat might otherwise be hard to imagine From Disraeli’s revelation to the first President Bush’sproclamation of an impending “new world order,” many of the elites appear sufficiently comfortablewith the use of their power that they need not always keep it strictly secret.67

The Power Behind the Central Banks

In the previous chapter we described the emergence of central banks and their role in making money

an instrument for consolidating political control Carroll Quigley helps us to understand the

connection between central banks and the financial elite He writes:

It must not be felt that these heads of the world’s chief central banks were themselves

substantive powers in world finance They were not Rather, they were the technicians

and agents of the dominant investment bankers of their own countries, who had raised

them up and were perfectly capable of throwing them down The substantive financial

powers of the world were in the hands of these investment bankers (also called

“international” or “merchant” bankers) who remained largely behind the scenes in their

own unincorporated private banks These formed a system of international cooperation

and national dominance which was more private, more powerful, and more secret than

that of their agents in the central banks This dominance of investment bankers was based

on their control over the flows of credit and investment funds in their own countries and

throughout the world They could dominate the financial and industrial systems of their

own countries by their influence over the flow of current funds through bank loans, the

discount rate, and the re-discounting of commercial debts; they could dominate

governments by their control over current government loans and the play of the

international exchanges In this system the Rothschilds had been preeminent during

much of the nineteenth century, but, at the end of that century, they were being replaced by

J P Morgan whose central office was in New York, although it was always operated as

if it were in London (where it had, indeed, originated as George Peabody and Company

in 1838) Old J P Morgan died in 1913, but was succeeded by his son of the same name

(who had been trained in the London branch until 1901), while the chief decisions in the

firm were increasingly made by Thomas W Lamont after 1924.68

Quigley tells us that these investment bankers differ from ordinary bankers

in distinctive ways: (1) they were cosmopolitan and international; (2) they were close to

governments and were particularly concerned with questions of government debts; (3)

their interests were almost exclusively in bonds and very rarely in goods, since they

admired liquidity; (4) they were, accordingly, fanatical devotees of deflation;69 (5) they

were almost equally devoted to secrecy and the secret use of financial influence in

political life These bankers came to be called “international bankers” and, more

particularly, were known as “merchant bankers” in England, “private bankers” in France,

and “investment bankers” in the United States In all countries they carried on various

kinds of banking and exchange activities, but everywhere they were sharply

distinguishable from other more obvious kinds of banks, such as savings banks or

commercial banks.70

Quigley goes on to spotlight the increasingly obvious superficiality of differences between politicalparties and to demonstrate their subservience to the money power, saying, “To Morgan all politicalparties were simply organizations to be used, and the firm always was careful to keep a foot in allcamps.”71 Quigley’s description of the various organizations established to influence public policyand the particular individuals who founded, ran, and financed them becomes tedious in its detail—but

it is the forest that we need to see and not the trees Naturally, in the more than four decades sinceQuigley wrote his book, the names of the personages (and even some of the organizations) have

changed, but the goals and general structure of this elite establishment remain the same While

Quigley seemed to think that the power of the AngloAmerican establishment was on the wane, it

seems clear that the trend toward greater elite control has continued, though with a more diversecomposition Among those organizations and groups that are prominent on the current scene in

advancing the elitist agenda are the Council on Foreign Relations, the Trilateral Commission, theBilderberg groups, and the banking companies and the families that control them

It is a curious thing that Quigley, in his book, would so frankly expose the machinations of the elite

“money masters” and their plans to gain total global control, while warmly supporting their purposes

and goals I agree with W Cleon Skousen’s assessment that, “The real value of Tragedy and Hope is

not so much as a ‘history of the world in our time’ (as its subtitle suggests) but rather as a bold andboastful admission by Dr Quigley that there actually exists a relatively small but powerful groupwhich has succeeded in acquiring a chokehold on the affairs of practically the entire human race.”72

A Merging of Interests

The politicization of money, banking, and finance (which prevails throughout the world today) hasenabled the concentration of power and wealth in few hands—a situation that has been extremelydamaging to societies, cultures, economies, democratic government, and the environment Nationalgovernments have arrogated to themselves virtually unlimited spending power, which enables them tochannel wealth to favored clients, to conduct wars on a massive scale, and to subvert democraticinstitutions and the popular will The privileged private banking establishment has managed to

monopolize everyone’s credit, enabling the few to exploit the many through their partiality in

allocating credit, by charging usury (disguised as “interest”) and increasingly exorbitant fees, and byrewarding politicians for their service in promoting their interests

These two, government and banking, have colluded to create a political money system that

embodies a “debt imperative” that results in a “growth imperative,” which forces environmentaldestruction and rends the social fabric while increasing the concentration of power and wealth Itcreates economic and political instabilities that manifest in recurrent cycles of depression and